Financial globalization and exchange rates

Lane, Philip R. and Milesi-Ferretti, Gian Maria (2004) Financial globalization and exchange rates. CEPDP (662). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 075301792X

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Abstract

The founders of the Bretton Woods System sixty years ago were primarily concerned with orderly exchange rate adjustment in a world economy that was characterized by widespread restrictions on international capital mobility. In contrast, the rapid pace of financial globalization during recent years poses new challenges for the international monetary system. In particular, large gross cross-holdings of foreign assets and liabilities means that the valuation channel of exchange rate adjustment has grown in importance, relative to the traditional trade balance channel. Accordingly, this paper empirically explores some of the inter-connections between financial globalization and exchange rate adjustment and discusses the policy implications.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 2004 the authors
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HG Finance
JEL classification:	F - International Economics > F3 - International Finance > F31 - Foreign Exchange F - International Economics > F3 - International Finance > F32 - Current Account Adjustment; Short-Term Capital Movements
Date Deposited:	24 Jul 2008 13:54
Last Modified:	13 Sep 2024 19:52
URI:	http://eprints.lse.ac.uk/id/eprint/19926

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